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Campaign 2004:  The Candidates on Trade - 2004-08-30

One of the many foreign policy issues in this year’s U.S. presidential campaign is each candidate’s position on trade and outsourcing. Outsourcing, when U.S. companies hire workers in foreign countries to do jobs formerly held by Americans, is an especially sensitive topic this election year. As VOA’s Serena Parker reports, President Bush and his challenger, Senator Kerry, have promised to work hard to create new jobs at home and prevent jobs from going overseas. The difference lies in how they propose to do that.

Senator John Kerry made headlines earlier this year when he called CEO’s who outsource jobs from the United States “Benedict Arnold CEOs”, after a traitor of the American Revolutionary War. This sparked widespread criticism.

Since then, Senator Kerry has toned down his rhetoric to avoid Republican charges that he is anti-business and anti-trade. “Now I’m a realist. I know how the global economy works,” he says. “Outsourcing will occur. But a company that stays here should not be put at a competitive disadvantage by our own tax code because a company that leaves can defer paying its taxes, perhaps forever. That’s the law today.”

Senator Kerry wants to change the corporate tax code to shut this loophole that penalizes companies that keep jobs in the United States. Mr. Kerry says he is aware that if an American company wants to sell products in a foreign country and use local labor to make those products, there is little to be done to stop them. But he wants to put an end to the practice of American companies that set up shop abroad to manufacture goods that are then exported back to the United States.

One way to discourage that, he says, is to lower the cost of doing business in the United States. For instance, companies are spending more on employee health insurance plans as health care costs have skyrocketed.

“I will focus on health care costs that today burden American enterprise,” Senator Kerry says, “and for example, make it $1700 more expensive to produce the same car here in the United States than it costs in Canada.”

Like Mr. Kerry, President Bush has long argued that in order for American companies to compete successfully on a global scale the cost of doing business in the United States must be reduced. His administration and Republican lawmakers have pushed through a series of tax cuts to free up capital for businesses and entrepreneurs to invest in new technologies and create more jobs. Mr. Bush says he is also working to reform the legal system so that health insurance costs go down, relieving the pressure on business.

According to President Bush, another key to keeping jobs at home and creating new ones is expanding American markets through increased trade, especially because one in five manufacturing jobs directly depends on selling abroad.

“Look at it this way: America has got five percent of the world’s population,” he says. “That means 95% of potential customers are in other countries. We cannot expect to sell our goods and services and create jobs if America and our trading partners start raising barriers and closing off markets.”

President Bush has signed multiple free trade agreements during his first four years in office including ones with Morocco, Australia and the Dominican Republic. If elected to a second term, he says he will continue to fight for free and fair trade.

“If we’re opening up our markets, it makes sense to get others to open up theirs,” the President says. “And so we’re dedicated to making sure that other nations treat us fairly. That’s why I pressed for free trade agreements with Singapore and Chile. We want them to open up their markets to America’s goods and services.”

Some Democrats are critical of free trade agreements, which they say hurt American workers. However, John Kerry consistently cast votes in the U.S. Senate in favor of international trade agreements. He says he will continue to support free trade agreements although he will demand that America’s trading partners play by the rules. According to John Kerry, this is something the Bush Administration has not done.

“I won’t let America wage the fight for our economic future with one hand tied behind our back,” he says. “No one should misunderstand me. I am not a protectionist, but I am a competitor.”

John Kerry promises to challenge China’s trade and finance policies that have hurt American manufacturers. He also vows to enforce labor and environmental provisions in trade agreements so that workers in other countries aren’t exploited.

Although John Kerry has taken pains to portray himself as friendly to big business, political analysts say it may be hard to sway American executives who have historically favored the pro-business Republican Party.